Is this the end of the Iran status quo?

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Amidst the rubble of cynicism in Washington and the international community, there’s been one sign of hope for American foreign policy: the West’s negotiations with Iran regarding its nuclear program. Remarkably, things seem to be shifting: diplomats have emerged from the latest round of negotiations emitting good vibes. The West’s crippling sanctions, led by the U.S., have worked.

But before we discuss what’s in flux, let’s recap what the status quo has been: the West, dubious of Iran’s vow that it is only investing in nuclear research and enrichment for energy and medical reasons, has set up a system of sanctions meant to choke the Iranian economy. The United States and Israel have tried to postpone Iran’s progress behind the scenes: the most significant example was 2010’s Stuxnet computer worm that damaged Iranian nuclear enrichment infrastructure. Meanwhile, Iran has responded with a stubborn march toward nuclear breakout capacity, and little willingness to negotiate. The sanctions, however, have begun to take a significant toll: sanctions have more than halved Iran’s crude exports since they tightened in mid-2012, cutting budget revenues by at least $35 billion a year. In Iran, we’ve seen massive inflation and black market demand for dollars.

To date, the range of possible outcomes have looked like a bell curve. We had a small, “fat tail” risk of the situation deteriorating and military strikes against Iran occurring (led by some combination of the United States and Israel). On the other end of the spectrum, we had an incredibly slim chance of a breakthrough deal that could peacefully keep Iran from going nuclear. The status quo — tightening sanctions and Iran’s slow movement toward nuclear breakout capacity — was the overwhelmingly likely occurrence.

But this year, the curve has shifted. The chance that the status quo simply continues is much reduced; the likelihood of the best or worst outcome — a military strike or a breakthrough deal — has risen significantly (although neither one is probable by any means).

So what changed? Two critical things. First of all, Iran’s domestic politics have shifted, at least in part thanks to the sanctions regime. In August, Hassan Rouhani took office after being elected on a promise for moderation and (relatively) more open dealings with the West, as well as a pledge to fix Iran’s hobbled economy. Without Mahmoud Ahmadinejad as president, the West is more amenable to negotiations.

The second major factor is that Iran is getting significantly closer to nuclear weapons capability. Per the August International Atomic Energy Agency’s (IAEA) report, the regime is on pace to become nuclear-weapons capable in 2014 or 2015 — and that window could narrow further. Iran is approaching nuclear breakout capacity, the point at which it could conceivably race to produce sufficient material for a nuclear weapon and hide it in a secure location before the U.S. or Israel could amass a military response to stop them. A realistic worst-case scenario could see breakout time drop to around 10 days — a span too short to assemble an effective response — by the middle of next year.

These two factors explain why the talks are so important: they are more likely to succeed, and there are now much higher stakes if they do not.

At the talks last week, American and Iranian officials met for an hour, Iran ran through a PowerPoint presentation about its proposed solution to the stand-off, and Iran and the West issued a joint statement praising the “positive atmosphere” of the get-together.

Happy days! But this is no guarantee of future success. This is just the beginning of the negotiations, and despite Rouhani’s open stance towards the West, the Supreme Leader Ayatollah Khamenei still calls the shots. (Though word from Iran is that Khamenei is behind the talks.) The sequencing is perhaps the most complicated part: the Iranians want the sanctions reduced before they scale back the nuclear program. The United States will demand the other order. On top of that, Iran wants to hold on to the right to enrich uranium; the Americans say that’s not acceptable.

Lastly, of course, there’s the chance that Israel may not be satisfied with a deal even if the Americans are. Recently I met with senior Israeli officials who thought the likelihood of a comprehensive deal was 25 percent. But a comprehensive deal that Israel could stomach? Less than 5 percent. After all, Netanyahu outlined Israel’s four key conditions in a recent speech — they add up to a nonstarter for Iran. If this latest round of negotiations breaks down and Iran still sprints to breakout capacity, the Israelis will likely attack themselves if the Americans won’t.

The worst-case scenario is that the West and Iran come close to a deal, but it falls apart, in a manner that the international community blames predominantly on the United States and Israel. This would embolden major markets like China and Russia to flout the sanctions, thus unraveling the West’s best bargaining chip with nothing to show for it in return. The West gets blamed, U.S. credibility is reduced even further, and Iran continues full speed ahead toward nuclear capability.

That’s what the American-led sanctions have been able to avoid thus far, but we may be reaching the inflection point. The chance that the status quo continues is diminishing. Success is closer now than ever — but that only makes the situation more precarious than ever before.

This column is based on a transcribed interview with Bremmer.

PHOTO: Iran’s President Hassan Rohani addresses a High-Level Meeting on Nuclear Disarmament during the 68th United Nations General Assembly at U.N. headquarters in New York, September 26, 2013. REUTERS/Mike Segar

The best-case scenario is that the West and Iran come to a deal. And, if the US doesn’t the international community will blame the United States and Israel. This will embolden major markets like China and Russia. Thus unraveling the West’s best bargaining chip with nothing to show for it in return. The West gets blamed, U.S. credibility is reduced even further, and Iran continues full speed ahead toward nuclear capability. (And, they have every sovereign right to do so. Unless, “other” countries are willing to give up their rights.)

We have reached the inflection point. The chance that the status quo continues is impossible. Success is closer now than ever — and that only makes the situation more precarious than ever before.

It goes like this:
Iran has the only (after Iraq fall) diversified economy in the Middle East and by leaving its nuclear aspirations (most probably for 10-20 years, the know how can’t be erased from heads of Iran scientists and engineers) it will win hegemony in ME over Saudi Arabia.
But strong Iran means strong Syria.
Strong Syria means no taking over of Golan Heights plus some more Libanian and Syrian lands by Israel. It means no water in Israel.
Israel lobby in US is really strong.
So United States will bever allow peace with Iran and abolishing sanctions.
Other states will observe Iran de-nuclearization mainly Russia and China. It will be sth similar to Syria deal.
US in order to not loose face will have to take part in the process or at least cannot be against.
In the future China will guarantee Saudi Arabia status quo in return for Saudi oil.
By the way, China has much more experience in succesfully managing autoritharian society. A lot of experience to share with Saudi Arabia, Quatar, Kuwait, UAE etc.

Like other technologically advanced non-nuclear nations (Germany, Japan, and about 40 others), Iran now has the capability to assemble nuclear weapons rather quickly.

Therefore, the only question remaining for it to negotiate with the West is whether it actually chooses to do. For it is sheer fantasy to imagine that Iran would surrender its right to enrich and dismantle its nuclear infrastructure.

Furthermore, neither the USA nor Israel have the political and economic bandwidth to start the war they are constantly threatening. A war that, in any case, would only delay Iran’s ability to go nuclear, and would most certainly guarantee it.

With the Iranians willing to grant verifiable assurances that they are not producing nuclear weapons, the regime of sanctions against Iran is sure to collapse. It only remains to be seen when precisely the international community issues it a death certificate.

Mr. Bremmer thinks he can fool the readers of his column by saying Israel/US will strike Iran if there is no progress. Bremmer, like Nut yahoo has been behind this strike thing from the past many years. Iran has repeatedly proven that its nuclear technology is not for negotiations. Even if the west dosent approve of it. A strike on Iran by any country will be the end of Israel. This is the reason why there will be no strike on Iran, even if Bremmer may think he can try to fool his readers.

So too has Iran’s policy worked to force the West to finally make a deal, to make the hard choices of what to offer. Until now, it was just hammer on them for surrender. Now they are so close that without a deal, they’ll go over the line.

So it is ripe for a deal, but because of what has been done by both sides. The West is constrained too, for the first time to make a deal, just like Iran is.

It’s even more likely nothing will happen if negotiations fail. A useless and wasteful argument will continue indefinitely and third or forth options will grow. New oil supplies, changes of technology and the emergence of new powers and economies could make those trapped in the current argument less important if not irrelevant. The argument may even be contributing to their weakening or even their demise and allowing those other options to grow faster. Maybe that’s a good thing? While the big guys are engaged in their conflicts and wasting their strengths, others are emerging who just might bury them. Someone will have to replace the old rotters before their conflicts stinks up the rest of the world.

All things must pass.

Lets face it – many people love the idea of Armageddon. It is change from their boring and frustrating lives even if it might mean the end of their lives.

Author Profile

Ian Bremmer is the president of Eurasia Group, the leading global political risk research and consulting firm. Bremmer created Wall Street's first global political risk index, and has authored several books, including the national bestseller, The End of the Free Market: Who Wins the War Between States and Corporations?, which details the new global phenomenon of state capitalism and its geopolitical implications. He has a PhD in political science from Stanford University (1994), and was the youngest-ever national fellow at the Hoover Institution.